Which of the following changes would probably not lead to an increase in aggregate expenditure?
a. an increase in aggregate wage income
b. an increased mood of optimism about the nation's economic prospects
c. an increase in the value of corporate stocks
d. a decrease in the income tax rate
e. an increase in the interest rate
E
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If the economy produces 12 capital goods and 40 consumer goods,
The economic way of thinking is
A) a biased perspective at the present time, and we should eliminate bias from economics. B) a biased perspective, but the existence of bias does not mean the discipline should be condemned. C) biased only when it is used to argue for particular policies. D) unbiased because economics is a science. E) unbiased insofar as its conclusions are drawn exclusively from actual facts.
Most Keynesians suggest that the Fed
A) use discretion in setting monetary policy. B) use fiscal policy to combat unemployment in the short run. C) follow a rule, such as keeping the money growth rate at 3%, regardless of the state of the economy. D) use fiscal policy to combat inflation in the long run.
Equilibrium:
A. Will only occur at full employment. B. Can occur at any output level. C. Will occur at or below full employment. D. Will occur at or above full employment.